A curious hybrid

In the town of Crewe, crowded ranks of terraced homes line Badger Avenue as it leads to Pyms Lane. It could be any street in any British industrial town - except for the incongruous passing of a Rolls-Royce or a Bentley. Each is worth more than twice as much as any of those houses, yet they provoke not a glance.

Pyms Lane has been home to one of the auto industry's most prestigious marques for more than 60 years. Like the nearby houses, little has changed in all of that time - until now.

The Rolls-Royce Bentley Motor Cars factory is being rebuilt. The change could not be more radical. At midnight December 31, 2002, ownership of the Rolls-Royce brand passes to BMW AG.

Current owner Volkswagen AG will keep the factory and the Bentley marque. Volkswagen has ambitious plans. The company is spending $800 million to prepare the plant for a mid-sized 'volume' model. The plant that produced 1,800 cars a year will expand to assemble 9,000 units annually.

The plant will be of old and new. It will retain the woodshop, where craftspeople with the skills of cabinetmakers apply veneer to instrument panels. Rows of sewing machines will remain for employees who stitch leather and carpets. But Volkswagen will add an assembly line for the new Bentley, called MSB. And it will install robots to handle a bigger portion of the vehicle's glazing and sealing.

As production rises, the plant will increase just-in-time deliveries of parts. It will ask suppliers to deliver assembled parts modules. To save money, it will buy some components from the Volkswagen Group's suppliers. It will significantly shrink its network of 500 suppliers. And it will expand the use of worker teams trained in the art of kaizen, or continuous improvement.

All of these practices are common in larger, more modern assembly plants. But it is a brave new world for Pyms Lane. In 1938 this was a new factory, building Merlin engines for the Spitfire fighter plane. In 1946, the plant began producing the Bentley Mark 6. Annual production peaked at 3,333 units in the late 1980s before recession hit the luxury car market.

The 62-year-old plant is an oddity - more like an industrial museum than a modern factory. Workers machined nuts and bolts on the site, while wiring was color-coded by company employees. A few years ago, the company installed a few robots in the paint shop. But it remains an operation that uses a lot of labor.

It took Volkswagen executives a while to comprehend Crewe's culture of craftsmanship. During one presentation, plant engineering manager Mark Harding showed VW executives photos of Crewe's production area and explained that the plant could produce 2,500 cars.

The Volkswagen executives were stunned. 'They stared back incredulously and said `This is not possible,' ' Harding recalls. 'I had to explain to them that I was talking about 2,500 vehicles a year. At Wolfsburg, they were used to producing 4,500 a day.'

THE ROLLS LEGEND

Volkswagen chief Ferdinand Piech had a similar revelation when he first visited Pyms Lane. When an employee told him it took 11 hours to hand-stitch the leather on the steering wheel, Piech remarked that it took that long to build an entire Lupo.

In fact, the sheer time and effort to build a Rolls-Royce adds to the legend of the marque. The plant takes more than 650 hours to build a four-door Rolls-Royce or Bentley. Workers take 60 hours to prepare the wood veneers for the fascia, and 15 cows provide the 400 pieces of hide needed for one car. The new Bentley will require fewer hours to assemble, although Rolls-Royce declined to say by how much. But Volkswagen's modernization plan - which will retain the plant's wood and leather workers - seems likely to leave this mystique intact.

In years past, Rolls-Royce often boasted about the meticulous work of such craftspeople. But the company is feeling a bit defensive about it these days.

'We have this image of a being a quaint, old English craft shop, but this is a very high tech-business,' says spokeswoman Janette Green. For example, Rolls-Royce purchased a CNC 5-axis router, a sophisticated machine that has allowed craftspeople to create more complex shapes in wood. Rather than eliminate the need for craftspeople, these machines simply demand more skill, she says.

Volkswagen wants to install the assembly line without shutting down the plant. It will not be easy. To do so, the automaker will rotate the factory to accommodate the MSB while maintaining production of the Bentley Arnage. To avoid a jam, construction workers move in when assemblyworkers go home. But the plant must tolerate a degree of chaos. Sub-assembly operations zigzag their way around the building. Somehow, components arrive at the right place and the right time, helped by an assembly line that moves two millimeters per minute.

The automaker also must cushion the effect of its plant expansion on the surrounding neighborhood. Truck deliveries, for example, will rise sharply. Volkswagen will have to work with the local authorities to prevent traffic problems.

LARGE PARTS INVENTORY

Even before Bentley's acquisition by Volkswagen, the supply line to the Crewe factory was starting to change. Because of the small production volumes involved, it was easy - and necessary - to carry a large inventory of parts. Because the plant produced one two-door Bentley per week, it was impossible to achieve economies of scale on ordering parts. Many parts were ordered not only for Rolls-Royce and Bentley models, but for individual customers' cars. 'We also have to keep stocks for the future,' says Green. 'This is a unique operation, and we stock replacement parts for every model we have made here since 1955.'

With the assistance of Volkswagen's purchasing power, Crewe will reduce its inventory to five days' worth of parts. The plant will get more modules, and 30 percent of its parts deliveries will be on a just-in-time basis.

When the MSB is ready, Volkswagen will ship painted bodies from Germany. This is nothing new at Crewe. Until the Seraph and Arnage were introduced, all bodies came from outside contractors. Mayflower Corp. and Vickers Pressings will supply the body panels.

Although the new Bentley will share some parts with Volkswagen, it will have its own platform and powertrain. In fact, the vehicle was designed on site in a new $2.5 million design center headed by Dirk Van Braeckel, Skoda's former chief designer. The use of Volkswagen parts will 'not compromise the Bentleyness of the MSB in any way,' says company spokeswoman Deborah Risby.

The changes at Crewe have generated optimism among the workers. Despite the currency fluctuations that led other automakers to shut down plants, Rolls-Royce expects to add 800 jobs to its work force of 2,500 employees. One such worker is David Preece, who has 'worked at Royce's,' as the locals say, since 1959.

When he started as an apprentice, a fence ran through the factory separating it from a refrigerator factory. At the time, the plant produced aircraft engines, steering racks for tanks and an engine for the Austin Princess.

'Losing Rolls-Royce is very sad, but I can't remember a more exciting time to work here,' Preece says. 'When Volkswagen bought us it was a bit of a shock. There was a fear of the unknown at first, but now I think it is the best thing that could have happened. I am learning all sorts of new things even at my age.'